The bell tolls for Pompey 2 Feb 12

If Michel Platini lies awake at night wondering about the wisdom of pressing ahead with FFP regulations, he might do well to consider events at Portsmouth.

Pompey went in Administration in 2010 having run up debts of around £135m. The club had adopted a wage structure that could only ever be sustained through cash injections from the Gaydamak family. Once the funds dried up, the club found they could not pay the wages and Administration followed.

In a recent interview with Express FM, CEO Lampitt advised that by the time the club came out of Administration, Pompey had managed to get the P&L account to a broadly break-even level.  However, when the club was then acquired by 
Vladimir Antonov (via a holding company called CSI), the club changed it's financial approach. Clearly not mindful of the lessons of the recent past, Lampitt proceeded to use a £10.5m loan (as oppose to equity) from CSI to boost the playing staff.  Players such as Huseklepp (£1.5m) and Pearce (500k) were purchased.  Within a short period of time, the club had yet again adopted a wage structure that could only be sustained through cash injections form their overseas owner.  When Antonov was arrested (for appropriating his Baltic banks’ customer deposits) Pompey found that once again they could not pay the player wages.  Lampitt points out that his spending was not at the same level as his pilloried predecessor Peter Storrie and that the Football League had also been taken-in by the Antonov’s ‘proof of funds’ documentation.  Although many fans believe he is culpable for their current plight, if the CEO is to be believed, Portsmouth have simply been extraordinarily unlucky.

At the time of writing, Pompey fans fear that the situation is so grave that the club may even by-pass Administration and simply be wound up.  The nightmare at Portsmouth illustrates the danger of ‘light-touch’ governance and will surely give Platini some comfort in his plans for a more prescriptive approach to football financing.